A Price Ceiling

Price ceilings cause shortages.

A price ceiling. Price ceiling can also be understood as a legal maximum price set by the government on particular goods and services to make those commodities attainable to all consumers. Price ceilings are normally government imposed to protect consumers from swift price increases in basic commodities. In effect a binding price ceiling is a truly effective price ceiling.

It is an implicit tax on producers and an implicit subsidy to consumers. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. A price ceiling is a government or group imposed price control or limit on how high a price is charged for a product commodity or service.

It has been found that higher price ceilings are ineffective. A price ceiling is a type of price control usually government mandated that sets the maximum amount a seller can charge for a good or service. Such conditions can occur during periods of high inflation in the event of an investment bubble or in the event of monopoly ownership of a product all of which can cause problems if imposed for a long period without controlled ratio.

Do these create shortages or surpluses. What does price ceiling mean. The government demands that prices stay below that price which binds the market with regard to that good.

Price ceiling is a measure of price control imposed by the government on particular commodities in order to prevent consumers from being charged high prices. A price ceiling occurs when the government puts a legal limit on how high the price of a product can be. A price ceiling is the highest price a supplier is allowed to set for a product or service.

A price ceiling is a government set price below market equilibrium price. A price ceiling is a government imposed limit on the price charged for a product. However a price ceiling can cause problems if imposed for a long period without controlled rationing.